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OPINION

EDITORIAL: Consumers lose in nuke subsidy plan

Published 12:00 a.m. ET Sept. 11, 2018

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State legislative committees on Wednesday approved bills that would let PSEG add a surcharge on bills to help keep its South Jersey nuclear plants operational. Asbury Park Press file photo State lawmakers Wednesday approved bills that would allow PSEG to add a surcharge on bills to help keep its South Jersey plants operational.(Photo: ~File photo)

New Jersey’s nuclear subsidy idea was a loser from the start. Legislators earlier this year bowed to Public Service Enterprise Group’s insistence on financial help from consumers to keep South Jersey nuclear plants afloat – meaning to make them more profitable – and signed off on a $300 million plan.

Of course lawmakers told us that the money merely represented a maximum, and that a Board of Public Utilities review would determine how much – or even if – plants would receive assistance. That process began last week, and officials have been tossing around a lot of political-sounding comments about extensive scrutiny of the nuclear applications – as if awards weren’t already essentially a done deal.

In a press release, BPU President Joseph Fiordaliso said the board and its staff take their responsibilities seriously, and will determine whether subsidies are warranted. Yet legislators and the governor have already decided they are; that was the whole argument in favor of the subsidies bill, that the plants wouldn’t stay open without help, that New Jersey needs nuclear power, and that the $300 million figure was an appropriate number to put in place. The final subsidies might not hit that number on the nose, but we can certainly assume they won’t be far off.

It’s also no secret New Jersey consumers will be forced not only to foot the profitability bill for PSEG’s South Jersey plants, but also for nuclear plants in other states that contribute to the PJM Interconnection regional energy grid. What will those states be doing to benefit us? Nothing, basically.

We can acknowledge the value of nuclear power as an energy source that contributes no carbon emissions. It has an ongoing role to play as part of Gov. Phil Murphy’s aggressive plans to require that half the state’s energy come from renewable sources by 2030 – even if environmentalists will argue about the proper characterization of nuclear energy within the renewable landscape. Other states have faced similar dilemmas in trying to keep their own nuclear plants competitive against cheap natural gas.

All of this, however, begs the question: Why couldn’t the subsidies have been determined before legislators created the pot of cash from which they will be taken? The plants aren’t losing money, they’re just not generating enough profit. PSEG won’t open its books to the public. Yet lawmakers felt compelled to announce to one and all upfront that as much as $300 million might be needed to get the job done. That taints everything moving forward.

Officials are also excluding the Division of Rate Counsel – which represents ratepayers in utilities cases – as a consumer advocate in assessing the nuclear plants’ plight. The subsidies, and other effects of Murphy’s energy plan, will undoubtedly drive up energy costs, but ratepayers don’t have a voice.

The deck has been stacked in nuclear’s favor from the moment the subsidy debate began. That won’t change now. The BPU can still strike a blow for consumers. But don’t bet on it.